Tag Archives: Dalgaranga

NRW in line for A$702 million Karara Mining iron ore gig

NRW has received a letter of intent from Karara Mining Ltd to carry out mining services works at the Karara iron ore mine in the Gascoyne region of Western Australia.

Subject to reaching agreement with Karara, the anticipated value of the contract is around A$702 million ($529 million) over a five-year duration with a project workforce averaging circa-250 personnel.

MACA, through its recently acquired Mining West business, currently holds the contract mining agreement at Karara.

The works to be performed include load and haul, drill and blast, and run of mine re-handling. The drill and blast component will be undertaken by NRW’s wholly-owned subsidiary, Action Drill & Blast Pty Ltd. In addition, the work includes train loading and re-handling of the product stockpiles together with “miscellaneous day works” at the mine site, camp and access roads.

Karara is the largest mining operation and the first major magnetite mine in the Mid West region. It produces a premium, high-grade concentrate that it exports to steelmakers.

“With an expected mine life of 30-plus years, Karara’s operation includes a large open-pit mine, complex ore processing and beneficiation plant and significant infrastructure and logistics networks,” NRW said.

NRW estimates an equipment capital expenditure of around A$170 million to be progressively spent over the term, which will include the purchase of three 600 t face shovel excavators and a fleet of 220 t trucks.

NRW CEO, Jules Pemberton, said: “With a strong local presence in the area through our Geraldton-based DIAB Engineering business and our mining contract with Gascoyne Resources at the Dalgaranga mine site, we look forward to continuing to support the existing and highly experienced workforce on site through this transition, as well as creating employment opportunities for the Gascoyne region community.”

Karara CEO, Changjiang Zhu, said: “NRW is an established Western Australia-based mining and civil contractor with extensive open-cut mining experience gained through a number of successful mining operations in the state. Offering new prime equipment, NRW has the capability to undertake the entire Karara scope of work comprising a broad range of mining, construction and engineering services.

“We look forward to negotiation of an agreement with NRW and commencement of mining services early next year.”

NRW Holdings to keep mining Gascoyne’s Dalgaranga gold project

NRW Holdings says it has reached agreements with Gascoyne Resources to keep providing services at the Dalgaranga gold mine, in Western Australia, following the ASX-listed miner’s successful A$125 million ($89 million) recapitalisation process.

NRW has agreed binding terms with Gascoyne for an extension of both mining and drill & blast services for the full life of mine at Dalgaranga, which increases the overall contract value by circa-A$180 million.

In terms of the recovery of all pre-administration debts owed to NRW, it has received A$7 million in cash, as foreshadowed in Gascoyne’s recapitalisation agreement, and received 24 million Gascoyne shares (post-consolidation) valued at A$12 million at the issue price of Gascoyne’s A$85.2 million equity raising. NRW will also receive a further A$13.7 million linked to ounces produced at Dalgaranga and the gold price.

In addition to this, NRW also exercised its rights as part of the Gascoyne Entitlement Offer and now holds, in total, 36.9 million shares in the gold miner (post-consolidation).

Commenting on the work undertaken with Gascoyne and FTI as administrators, Andrew Walsh, NRW’s CFO, noted: “We have worked closely with the teams in both Gascoyne and FTI to support the recapitalisation plan recognising that a viable Dalgaranga project was critical to the success of that process. Output from the project has been consistently above 6,000 oz/mth for most of this year which has provided the basis for a great solution for both Gascoyne and NRW.

“Recent announcements on potential additional resources will provide opportunities for NRW to provide additional services beyond the current life of mine plan.”